REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 17, 1981 at 9:00 A.M. in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Coseka Resources (USA), Ltd., for an order establishing 160-acre drilling and spacing units [or the production of gas and associated hydrocarbons from the Mancos "B" formation underlying certain lands in Rio Blanco County, Colorado.

FINDINGS

The Commission finds as follows:

1. Coseka Resources (USA), Ltd., as applicant herein, is aa interested party in the subject matter of the above-referenced hearing.

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. Evidence presented at the hearing indicates that the Mancos "B" form- tion constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Rio Blanco County, Color ado, to-wit:

TownShiP 3 South, Range 103 West, 6th P.M. Section 8: All Section 16: All Section 9: All Section 17: All

5. In order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mancos "B" forma-tion, common source of supply underlying the lands defined herein; that said units should be 160-acres and consist of a quarter section, according to the governmental survey, and the permitted well for each unit should be located in accordance with Rule 318 of the Rules and Regulations of the Commission and the existing producing or producible wells should be designated as the permitted well for the unit upon which each is located.

6. All geological and engineering data concerning the Mancos "B" forma-tion indicate that one well will efficiently and economic ally drain an area of approxima-rely 160-acres, and that the drilling unit of the size and shape heretoabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Mancos "B" formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to a well drilled, completed or recompleted in the Mancos "B" formation underlying the lands in the White Face Butte Field, herein described, in (over) addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. One hundred-sixty (160) drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Mancos "B" formation underlying the following described lands in the White Face Butte Field Rio Blanco County, Colorado, to-wit:

Township 3 South, Range 103 West, 6th P.M. Section 8: All Section 16: All Section 9: All Section 17: All

Rule 2. Said drilling units shall consist of 160-acres and consist of a quarter section according to the governmental survey. The permitted well shall be located in accordance with Rule 318 of the Rules and Regulations of the Commission. and the existing producing or producible wells shall be designated as the permitted well for the unit upon which each is located.

IT IS FURTHER ORDERED, that the provisions contained in the above order and rules and regulations shall become effective forthwith.

IT IS FURTHER ORDERED, that the, Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders, rules and regulations.

ENTERED this day of September 1981 as of August 17. 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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